Ithaca Energy, a leading independent oil and gas operator in the UK North Sea, has entered into an exclusivity agreement in relation to a potential transformational combination with substantially all of Eni S.p.A.’s (“Eni”) UK upstream assets including the recently acquired Neptune Energy assets, excluding certain assets including Eni’s CCUS and Irish sea assets.

Eni has granted Ithaca Energy exclusivity in respect of the assets, the subject of the Potential Combination, for a period of 4 weeks from the date of this announcement. Ithaca Energy and Eni have entered into the Exclusivity Agreement to allow time to separately progress the contractual documentation required in connection with the Potential Combination.

Key highlights of the Potential Combination

• Eni will contribute its UK business in exchange for the issuance of new Ithaca Energy shares to Eni, with Eni anticipated to hold between 38% and 39% of the enlarged issued share capital of Ithaca Energy following completion
• Eni has a well-diversified asset base across 4 key hubs: Elgin Franklin, J-Area, Cygnus and Seagull; Ithaca Energy is already a partner in the Elgin Franklin and Jade fields
• Eni’s UK business had 2023 pro forma production of 40-45 kboe/d and 2P reserves of c.100 mmboe as at 31 December 2023[1]
• The Potential Combination would represent a value-accretive opportunity for Ithaca Energy’s shareholders, supporting delivery of the Company’s Buy, Build and Boost strategy

The Potential Combination would:

• Add significant scale and diversification to Ithaca Energy’s business: Significantly growing pro forma production to above 100 kboe/d, creating the 2nd largest independent operator in the UKCS by production[2]
• Create a leading UKCS portfolio: Enhancing Ithaca Energy’s status as the largest independent operator by resource, holding stakes in 6 of the 10 largest fields[3]
• Enable material future growth for Ithaca Energy: Boost near term cash flows to unlock growth from Ithaca Energy’s development projects whilst supporting shareholder returns
• Create a long-term strategic partnership with Eni: Eni would become a major shareholder in the enlarged group supportive of delivery of Ithaca Energy’s Buy, Build and Boost strategy. It is contemplated that Ithaca Energy would have access to Eni’s leading technical expertise to drive future growth

Ithaca Energy anticipates that the Potential Combination will require shareholder approval as a Class 1 transaction. Additionally, as Eni will hold between 38% and 39% of the voting rights of Ithaca Energy at completion of the Potential Combination, a mandatory offer would normally be required under Rule 9 of the UK Code on Takeovers and Mergers. However, given that Delek will still hold shares carrying more than 50% of the voting rights following completion of the Potential Combination, the UK Panel on Takeover and Mergers have granted a dispensation from Rule 9 pursuant to note 5 (b) of Rule 9 under the Takeover Code. Accordingly, completion of the Potential Combination will not be conditional upon and will not require approval by Ithaca Energy’s independent shareholders in relation to a Rule 9 waiver.

Although the discussions are at an advanced stage, there can be no certainty that a Potential Combination will occur, nor as to the final terms or timing on which a Potential Combination might be concluded.

[1] Wood Mackenzie
[2] Wood Mackenzie
[3] Wood Mackenzie

KeyFacts Energy: Ithaca Energy UK country profile   l   Eni UK country profile